The amendments imply a material worsening of retailers' economics and in our view represent one of the worst case scenarios. The proposals are likely to be submitted to the State Duma in the autumn session. As a result, we do not expect them to be implemented in the next 12 months.
Following the adoption of the Retail Law in 2010, state officials called for numerous amendments which were largely argued for by the retail lobby. We do not rule out the possibility of more favourable terms for producers vs. retailers in Russia, but would expect them to be implemented in a more gradual manner. The vague outlook on the final version of the amendments and the timing means that the news is negative for sentiment at this point.